On 20th July 2018, CoinMarketCap [CMC], a well-known website for tracking various cryptocurrencies, retorted back to the critics by taking a stand for data transparency. CMC was accused of wash trading to which they have hit back with a blog post describing the decision to suppress such behavior.
CoinMarketCap on its blog post said:
“All the information that you see on our site is aggregated from hundreds of exchanges based on the APIs that they provide us. When we list exchanges, we do our best to verify with exchanges that the APIs they provide us will pipe through the freshest and most accurate data possible.”
CMC had gone through increasing concerns regarding the exchanges volumes and rankings. There were three main concerns that mislead the information on the site. Those concerns were:
- Fee-free/Transaction mining models: Many exchange platforms have fostered transaction mining as a new model in order to repay the users with their own exchange coins. With transaction mining models, users are incentivized to trade back and forth so that more coins can be mined.
- Low fee models: Few exchanges charge low fees for facilitating more trading activities. These fees may often fluctuate, and may not be accurate to the user at CoinMarketCap.
- Artificial Volumes/wash trading: In order to preserve a minimum level of volume that leads to wash trading, the buying and selling of the same coins transacted by a user.
CoinMarketcap has built its relationship with many exchanges listed on their site. The data provided to CMC by different exchanges are verified. However, the information is not censored, giving a choice to the users to make their own decisions. Previously, CoinMarketCap followed a process of verifying the incoming data that were to be listed. In the current week, the volume requirement process was removed.
The blog post of CMC added:
“Our team spends time researching new coins and exchanges to ensure that they are real projects, backed by real teams, and are not fraudulent, before putting them on CoinMarketCap. We are extremely conscientious about giving all exchanges and coins/tokens accurate representation on CoinMarketCap.”
As reported, CoinMarketCap will now allow leverage for the users to look for any exchanges specifically related to them. Additional introduction of seven  day and thirty  day volume will also be established for evaluating the consistency of the volume.
“We want to state that our philosophy is to provide as much information as possible to our users so that they can form their own conclusions and interpretations – and not introduce our own bias into that mix.”
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